AES Reports Third Quarter Financial Results; Completes 1.2 GW of Construction and Adds 2.2 GW of Renewables PPAs and Data Center Load Growth at US Utilities
Reaffirms 2024 Guidance and Long-Term Growth Rates
Strategic Accomplishments
Signed or awarded 2.2 GW of new contracts, including long-term renewables PPAs and data center load growth at US utilities
1.3 GW of renewables under long-term PPAs
900 MW of new data center load growth at AES Ohio
Completed the construction of 1.2 GW; on track to add a total of 3.6 GW of new projects to operations in full year 2024
Announced or closed nearly three-quarters of $3.5 billion asset sale proceeds target through 2027
In September, announced a strategic partnership with CDPQ to support AES Ohio's robust growth plans; agreed to sell a 30% indirect interest for approximately $546 million
On October 31, 2024, closed the sale of 47.3% equity interest in AES Brasil for approximately $630 million, including sale and hedge proceeds
Q3 2024 Financial Highlights
GAAP Financial Metrics
Diluted EPS of $0.72, compared to $0.32 in Q3 2023
Net Income of $210 million, compared to $291 million in Q3 2023
Net Income Attributable to The AES Corporation of $502 million, compared to $231 million in Q3 2023
Non-GAAP Adjusted Financial Metrics
Adjusted EPS1 of $0.71, compared to $0.60 in Q3 2023
Adjusted EBITDA with Tax Attributes2,3 of $1,168 million, compared to $1,008 million in Q3 2023
Adjusted EBITDA3 of $692 million, compared to $990 million in Q3 2023
Financial Position and Outlook
Reaffirming expectation of achieving upper half of 2024 Adjusted EPS1 guidance range of $1.87 to $1.97
Reaffirming annualized Adjusted EPS1 growth target of 7% to 9% through 2025, off a base of 2020 and 7% to 9% through 2027, off a base of 2023 guidance
Reaffirming 2024 guidance for Adjusted EBITDA2 of $2,600 to $2,900 million; now expecting to be towards the low end of the range due to extreme weather in Colombia and lower margins in the Energy Infrastructure SBU
Reaffirming annualized growth target2 of 5% to 7% through 2027, off a base of 2023 guidance
Reaffirming expectation of achieving upper half of 2024 Adjusted EBITDA with Tax Attributes2,3 range of $3,550 to $3,950 million
ARLINGTON, Va., Oct. 31, 2024 /PRNewswire/ -- The AES Corporation (NYSE:AES) today reported financial results for the quarter ended September 30, 2024.
"Our third quarter financial results and strategic accomplishments were very much in line with our expectations. Since our last call, we have signed or been awarded 2.2 GW of long-term contracts for renewables or new data center load growth at our US utilities. At the same time, we completed the construction of 1.2 GW of new projects," said Andrés Gluski, AES President and Chief Executive Officer. "Finally, we have announced or closed transactions for roughly three-quarters of our $3.5 billion asset sale proceeds target through 2027. We remain on track to deliver on all of our financial and strategic objectives in 2024 and beyond."
"With our year-to-date performance and our outlook for the remainder of the year, I am pleased to reaffirm our 2024 guidance and long-term growth rates through 2027 for all metrics," said Stephen Coughlin, AES Executive Vice President and Chief Financial Officer. "We expect our 2024 Adjusted EBITDA with Tax Attributes and our Adjusted EPS to be in the upper half of our ranges, as we have had great success in securing the tax value of our growth investments. 2024 Adjusted EBITDA is expected to be towards the low end of our guidance range, primarily due to extreme weather this year in Colombia and lower margins in our Energy Infrastructure SBU."
Q3 2024 Financial Results
Third quarter 2024 Net Income was $210 million, a decrease of $81 million compared to third quarter 2023. This decrease is the result of lower impairments and lower unrealized foreign currency losses in 2024, and higher contributions from renewables projects placed in service, partially offset by lower contributions from the Energy Infrastructure Strategic Business Unit (SBU).
Third quarter 2024 Adjusted EBITDA4 (a non-GAAP financial measure) was $692 million, a decrease of $298 million compared to third quarter 2023, driven by lower margins at the Energy Infrastructure SBU primarily due to the end of commercial operations at Warrior Run and prior year margin at the hedged merchant Southland facilities that are contracted primarily for capacity in 2024, and severe drought conditions in South America at the Renewables SBU. This was partially offset by higher contributions at the Utilities SBU and higher revenues from new projects at the Renewables SBU.
Third quarter 2024 Adjusted EBITDA with Tax Attributes4,5 was $1,168 million, an increase of $160 million compared to third quarter 2023, primarily due to higher realized tax attributes driven by more renewables projects placed in service, partially offset by the drivers above.
Third quarter 2024 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was $0.72, an increase of $0.40 compared to third quarter 2023, mainly driven by higher contributions from renewables projects placed in service in 2024, lower long-lived asset impairments in 2024, and prior year unrealized foreign currency losses at the Energy Infrastructure SBU. This was partially offset by lower earnings at the Energy Infrastructure SBU due to the end of commercial operations at Warrior Run.
Third quarter 2024 Adjusted Earnings Per Share6 (Adjusted EPS, a non-GAAP financial measure) was $0.71, an increase of $0.11, compared to third quarter 2023, mainly driven by a lower adjusted tax rate and higher contributions from renewables projects placed in service in 2024, partially offset by lower contributions from the Energy Infrastructure SBU.
Strategic Accomplishments
The Company's PPA backlog, which consists of projects with signed contracts, but which are not yet operational, is 12.7 GW, including 4.0 GW under construction. Since the Company's second quarter 2024 earnings call in August 2024, the Company:
Signed or was awarded 1.3 GW of long-term PPAs for new renewables, for a total of 3.5 GW in year-to-date 2024; and
Completed the construction of 1.2 GW of solar, energy storage, wind and gas, and expects to add a total of 3.6 GW to its operating portfolio by year-end 2024.
Since the Company's second quarter 2024 earnings call in August 2024, the Company signed agreements with data center customers for an additional 900 MW of new load growth at AES Ohio, for a total of 2.1 GW in year-to-date 2024.
In 2023 and year-to-date 2024, the Company has announced or closed nearly three-quarters of its $3.5 billion asset sale proceeds target through 2027.
In September 2024, the Company agreed to sell a 30% indirect interest in AES Ohio to CDPQ for approximately $546 million.
On October 31, 2024, the Company closed the sale of its 47.3% equity interest in AES Brasil for approximately $630 million, including sale and hedge proceeds.
Guidance and Expectations6,7
The Company is reaffirming its expectation that 2024 Adjusted EBITDA with Tax Attributes6,8 will come in the upper half of the range of $3,550 to $3,950 million, driven by new renewables.
The Company is reaffirming its 2024 guidance for Adjusted EBITDA6 of $2,600 to $2,900 million, but now expects to be towards the low end of the range, due to extreme weather in Colombia and lower margins in the Energy Infrastructure SBU. Results for the year will also be driven by significant asset sales closed in 2023 and 2024, partially offset by contributions from new renewables projects, improved margins in Chile, and rate base growth at US utilities.
The Company is reaffirming its expectation for annualized growth in Adjusted EBITDA9 of 5% to 7% through 2027, from a base of its 2023 guidance of $2,600 to $2,900 million.
The Company is reaffirming its expectation that 2024 Adjusted EPS10 will come in the upper half of its guidance range of $1.87 to $1.97. Growth in 2024 is expected to be primarily driven by new renewables commissionings, rate base growth at US utilities, and improved margins in Chile, but partially offset by asset sales and prior year margins on LNG transactions.
The Company is reaffirming its annualized growth target for Adjusted EPS10 of 7% to 9% through 2025, from a base year of 2020. The Company is also reaffirming its annualized growth target for Adjusted EPS9 of 7% to 9% through 2027, from a base of its 2023 guidance of $1.65 to $1.75.
The Company's 2024 guidance is based on foreign currency and commodity forward curves as of September 30, 2024.
Non-GAAP Financial Measures
See Non-GAAP Measures for definitions of Adjusted EBITDA, Adjusted EBITDA with Tax Attributes, Tax Attributes, Adjusted Earnings Per Share, and Adjusted Pre-Tax Contribution, as well as reconciliations to the most comparable GAAP financial measures.
Attachments
Condensed Consolidated Statements of Operations, Segment Information, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Cash Flows, Non-GAAP Financial Measures and Parent Financial Information.
Conference Call Information
AES will host a conference call on Friday, November 1, 2024 at 9:00 a.m. Eastern Time (ET). Interested parties may listen to the teleconference by dialing 1-833-470-1428 at least ten minutes before the start of the call. International callers should dial +1-404-975-4839. The Participant Access Code for this call is 132288. Internet access to the conference call and presentation materials will be available on the AES website at www.aes.com by selecting "Investors" and then "Presentations and Webcasts."
A webcast replay will be accessible at www.aes.com beginning shortly after the completion of the call.
1
Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended September 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort.
2
Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income (Loss) for the quarter ended September 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort.
3
Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties.
4
Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended September 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort.
5
Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties.
6
Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended September 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort.
7
Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended September 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort.
8
Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties.
9
Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended September 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort.
10
Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended September 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort.
About AES
The AES Corporation (NYSE:AES) is a Fortune 500 global energy company accelerating the future of energy. Together with our many stakeholders, we're improving lives by delivering the greener, smarter energy solutions the world needs. Our diverse workforce is committed to continuous innovation and operational excellence, while partnering with our customers on their strategic energy transitions and continuing to meet their energy needs today. For more information, visit www.aes.com.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, our expectations regarding accurate projections of future interest rates, commodity price and foreign currency pricing, continued normal levels of operating performance and electricity volume at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as the execution of PPAs, conversion of our backlog and growth investments at normalized investment levels, and rates of return consistent with prior experience.
Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES' filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risks discussed under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES' 2023 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except where required by law.
Any Stockholder who desires a copy of the Company's 2023 Annual Report on Form 10-K filed February 26, 2024 with the SEC may obtain a copy (excluding the exhibits thereto) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made. A copy of the Annual Report on Form 10-K may be obtained by visiting the Company's website at www.aes.com.
Website Disclosure
AES uses its website, including its quarterly updates, as channels of distribution of Company information. The information AES posts through these channels may be deemed material. Accordingly, investors should monitor our website, in addition to following AES' press releases, quarterly SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about AES when you enroll your e-mail address by visiting the "Subscribe to Alerts" page of AES' Investors website. The contents of AES' website, including its quarterly updates, are not, however, incorporated by reference into this release.
THE AES CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
(in millions, except per share amounts)
Revenue:
Non-Regulated
$ 2,352
$ 2,571
$ 6,654
$ 7,051
Regulated
937
863
2,662
2,649
Total revenue
3,289
3,434
9,316
9,700
Cost of Sales:
Non-Regulated
(1,794)
(1,813)
(5,198)
(5,392)
Regulated
(773)
(703)
(2,224)
(2,298)
Total cost of sales
(2,567)
(2,516)
(7,422)
(7,690)
Operating margin
722
918
1,894
2,010
General and administrative expenses
(57)
(64)
(198)
(191)
Interest expense
(379)
(326)
(1,125)
(966)
Interest income
119
144
312
398
Loss on extinguishment of debt
(1)
—
(11)
(1)
Other expense
(31)
(12)
(153)
(38)
Other income
64
12
120
36
Gain (loss) on disposal and sale of business interests
(1)
—
43
(4)
Asset impairment expense
(79)
(158)
(355)
(352)
Foreign currency transaction gains (losses)
(28)
(100)
2
(209)
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF
AFFILIATES
329
414
529
683
Income tax expense
(103)
(109)
(52)
(179)
Net equity in losses of affiliates
(9)
(14)
(21)
(43)
INCOME FROM CONTINUING OPERATIONS
217
291
456
461
Loss from disposal of discontinued businesses
(7)
—
(7)
—
NET INCOME
210
291
449
461
Less: Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries
292
(60)
670
(118)
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION
$ 502
$ 231
$ 1,119
$ 343
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:
Income from continuing operations, net of tax
$ 509
$ 231
$ 1,126
$ 343
Loss from discontinued operations, net of tax
(7)
—
(7)
—
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION
$ 502
$ 231
$ 1,119
$ 343
BASIC EARNINGS PER SHARE:
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax
$ 0.72
$ 0.34
$ 1.60
$ 0.51
Loss from discontinued operations attributable to The AES Corporation common stockholders, net of tax
(0.01)
—
(0.01)
—
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS
$ 0.71
$ 0.34
$ 1.59
$ 0.51
DILUTED EARNINGS PER SHARE:
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax
$ 0.72
$ 0.32
$ 1.58
$ 0.48
Loss from discontinued operations attributable to The AES Corporation common stockholders, net of tax
(0.01)
—
(0.01)
—
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS
$ 0.71
$ 0.32
$ 1.57
$ 0.48
DILUTED SHARES OUTSTANDING
713
712
713
712
THE AES CORPORATION
Strategic Business Unit (SBU) Information
(Unaudited)
